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Digital Transformation. How to Build a Culture of Change

 

  • By the end of 2017, two-thirds of the CEOs of Global 2000 companies will have digital transformation at the center of their corporate strategy- IDC FutureScape
  • 85% of enterprise decision-makers say they have a time frame of two years to make significant inroads into digital transformation or they will suffer financially and fall behind their competitors PWC
  • 88% of companies report they are undergoing digital transformation – Altimeter Group

Most companies are going through digital change, and they don’t even know about it. And the biggest challenge for them is going to be developing new business models and strategies to increase connectivity and engagement and implementing a digital strategy across the organization. In addition to managing the cultural changes brought on by this digital transformation.

Here are some great tips by McKinsey advisor James Bilefield, to get digital transformation on track in an organization. In his words,

Any change process starts with an awareness that there’s an issue in the organization. There are many ways to address those issues, but the “softer” things that signal change, such as altering the language used, are important. Some organizations even change dress codes and the office environment, break down silos between organizations, and make certain senior managers more visible. Leadership starts to be seen more around the office and to be more open to more junior levels of the organization than they may have typically been in the past. There’s a more informal, if you like, style of management.

Then you start to move into the ways the company judges itself—the key performance indicators (KPIs) and the measures you use, for individuals and for teams and for the wider organization—to try to drive real change. How high up do those new KPIs need to be on a dashboard that otherwise may have been rather traditional and may not have changed much for a decade or more?

And thirdly, it’s the actions you take, whether it’s putting a designer on your executive team, like Apple has, or even making a designer your CEO, as Burberry has recently done.

So there are a number of quite significant changes you can make to send a signal through the organization. It’s not just about a chief digital officer or a chief data officer or a chief analytics officer. Actually, this digital thing becomes everybody’s job, everyone’s responsibility. You need to inculcate that change across the organization, and you need to take many small and large steps to do that.

Building a culture of constant change

I think you need to be in a state of constant revolution. You don’t make a change and then just sit back and wait for the next five years of business as usual. I think you need to build a new momentum and rhythm in your business that reflects the new reality of the industry in which you are operating.

Many companies already have a strategy of continuous improvement in their businesses and in their operations globally. I think you need to instill, even in that kind of organization, a culture of continuous change and evolution in how things work.

Some changes are gradual and evolve toward an end goal, which becomes clear over time, and you need to make a number of small steps to do that. Sometimes you do this through external actions, such as acquisitions, investments, partnerships, or other external activity or statements. Or sometimes you do this through internal activity, such as the people you promote or the way you talk about the company and its customers and mission. Some people will be taken a little outside their comfort zone, but that’s OK, so long as you give them the permission to take small risks and fail quickly if they can.

The board’s role in the digital age

The role of the board in a digital business is quite different from the role of the board in a legacy business. One of the challenges I think many legacy companies face today is that their boards are not really ready to challenge them and to support and encourage their digital transformation.

If you think of the average age of most board members around the world—and, frankly, of their backgrounds as well—they are not digitally ready. A recent Russell Reynolds survey suggested, I think, that only 4 percent of global 500 companies truly have a board that’s digitally ready, even fewer in Asia–Pacific, and under 25 percent in the United States. So there’s still a long, long way to go.

To make a digital transformation happen, you need complete alignment—from the board through the executive team through the whole organization. Without that “air cover” from the board and from shareholders who understand the change that you’re taking the organization through, it is very, very hard to do it successfully.

For example, many board meetings are backward looking in their approach. The data they’re looking at is often a little old. They’re not looking at live data. Many board members are often not active customers of the company’s products or services. I think there’s a new generation of board director emerging that is much more hands-on, with a more entrepreneurial background. You mix that with some of the more traditional board profiles and you get greater diversity on the board.

Read full article on digital transformation here

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